What Does it Mean to Be 'Middle Class'?

By David Rohde

The
middle class has been intensively studied, but there is no official American government definition of the group, and no political consensus
exists over how it was created or how to strengthen it

Reuters

Are you middle class?

For decades, praising the middle class has been a staple of American
politics. Candidates vow to defend the middle class and accuse their
opponents of betraying it. But what, exactly, is the "middle class"?

Since I began writing this column three months ago, readers have
asked for an exact definition of the middle class. The question is a
legitimate and vital one. With studies
showing the American middle class in decline, understanding which
policies create, expand and protect the demographic is more important
than ever. But definitions vary.

Despite the incessant political lip service paid to the middle class,
there is no official American government definition of the group. The
middle class has been intensively studied but no political consensus
exists over how it was created or how to strengthen it. Liberals credit
government programs with helping create a thriving American middle class
after World War II. They cite the G.I. bill, home mortgage interest
deduction and state university system as examples. Conservatives credit
unbridled, American free market capitalism with the feat. I believe it
was both.

Within weeks of taking office, the Obama administration's
launched its own effort to help the group. Chaired by Vice President Joe
Biden, the "Middle Class Task Force" was launched in January 2009 and
includes the secretaries of labor, health and human services, education
and commerce.

The closest the task force came to defining the middle class was a January 2010 report "Middle Class in America."
The study never gives an exact income level that is "middle class."
Instead, echoing academic studies on the subject, the document concludes
that "middle class families are defined more by their aspirations than
their income."

The report lists typical American middle-class aspirations as "home
ownership, a car, college education for their children, health and
retirement security, and occasional family vacations." Obtaining these
goals is harder for middle class American families than it has been in
decades, the report argues, because the cost of health care, higher
education and housing have risen far faster than wages.

In academia, various definitions of the middle class are used.
Economists generally use income as the determinant. Using census data,
they break the American middle class into quintiles -- groups of twenty
percent -- and declare the middle sixty percent of Americans the middle
class. As I said in an earlier column, this is the definition I use. Based on 2010 census data, the middle class would be the sixty percent of Americans with household incomes from $28,636 to $79,040 a year.

Other researchers, such as sociologists, have tried to define
Americans as middle class by how they self-identify. One of the odd -
and I think positive - things about Americans is that they over-identify
as middle class. The practice embodies an American ideal that the
majority of society's members, not the few, should benefit.

Americans themselves give varying definitions of the middle class. In a 2008 Pew survey,
one-third of Americans who earned more than $150,000 a year -- 11
percent of Americans overall -- identified themselves as middle class. In
the same survey, 40 percent of Americans who earned less than $20,000 --
25 percent -- considered themselves middle class as well. The median
family income in the United States was $49,445 in 2010, a lower number than many Americans think.

After Occupy Wall Street protests began this fall, The Wall Street Journal
posted an online calculator that allows Americans to input their annual
income and see where they stand on America's 1 - 99 percent scale. You
can try out the calculator here. Your position in America's class hierarchy may surprise you.

In a series of interviews last week, American academics said the
state of the middle class needs vastly more study. They said finding
ways to aid the middle class is not possible without clearly
understanding what is happening to it.

John Logan, a Brown University sociology professor, called for a
large foundation to fund in-depth research on the middle class. He
believes such an effort would force academics to develop a more uniform
definition of middle class.

Frank Levy, an MIT economist, called for something more modest. He
said surveys of Americans that gauge how many households can find
affordable health care, education and housing would be more practical.
Both efforts would be a step forward.

As I said in my first column,
for me and many others the creation and preservation of middle classes
is vital. Before becoming a columnist, I worked as a foreign
correspondent and investigative reporter for The New York Times and The Christian Science Monitor for seventeen years.

Covering political, religious and ethnic conflict around the world
convinced me that the single largest instrument of stability in any
society is a middle class. Whatever their nationality, ethnicity or
faith, members of the middle class tend to reject extremist leaders, try
to make governments more effective, and often cherish the same values,
particularly merit, justice and stability.

I plan to visit communities inside the United States and around the
world to examine which economic policies help create middle classes to
see what lessons from abroad, if any, can be applied to the United
States. (So far, I've reported in Kentucky, Turkey, China and Wisconsin.)
Along the way I hope to determine whether growing middle classes
overseas inevitably mean a shrinking middle class in the United States.

In the meantime, I agree with calls for more intensive study of the
middle class. A clearer understanding of what is happening to the
demographic is desperately needed. The middle class can be defined. And
it can be helped.